Austerity pushing EU into new Dark Age: study

A critical study of the bloc’s response to the debt crisis has found that austerity is driving up unemployment, widening inequality and increasing the risk of social unrest as the number of poor people swells drastically

By Ian Traynor / The Guardian, BRUSSELS

Illustration: Yusha

Europe is sinking into a protracted period of deepening poverty, mass unemployment, social exclusion, greater inequality and collective despair as a result of austerity policies adopted in response to the debt and currency crisis of the past four years, according to an extensive study published on Thursday.

“Whilst other continents successfully reduce poverty, Europe adds to it,” said the 68-page report from the International Federation of Red Cross and Red Crescent Societies. “The long-term consequences of this crisis have yet to surface. The problems caused will be felt for decades even if the economy turns for the better in the near future... We wonder if we as a continent really understand what has hit us.”

The damning critique — obtained exclusively by the Guardian — of the policy response to the debt crisis that surfaced in Greece in late 2009 and raised fundamental questions about the viability of the euro, foresees extremely gloomy prospects for tens of millions of Europeans.

Mass unemployment — especially among the 120 million young Europeans living in or at risk of poverty — increased waves of illegal immigration clashing with rising xenophobia in the host countries; growing risks of social unrest and political instability estimated to be two to three times higher than most other parts of the world; and greater levels of insecurity among the traditional middle classes all combine to make a European future more uncertain than at any time in the postwar era.

“As the economic crisis has planted its roots, millions of Europeans live with insecurity, uncertain about what the future holds. This is one of the worst psychological states of mind for human beings. We see quiet desperation spreading among Europeans, resulting in depression, resignation and loss of hope. Compared to 2009, millions more find themselves queuing for food, unable to buy medicine nor access healthcare. Millions are without a job and many of those who still have work face difficulties to sustain their families due to insufficient wages and skyrocketing prices,” the report said.

“Many from the middle class have spiraled down to poverty. The amount of people depending on Red Cross food distributions in 22 of the surveyed countries has increased by 75% between 2009 and 2012. More people are getting poor, the poor are getting poorer,” it added.

The survey conducted in the first half of this year “mapped” the 28 countries of the EU plus a further 14 in the Balkans, eastern Europe and central Asia.

In the EU, it found that the grave impact of the crisis was not confined to the crisis-ravaged, bailed-out countries of southern Europe and Ireland, but extended to relative European success stories such as Germany and parts of Scandinavia.

Last year, the Spanish Red Cross launched a national appeal to help people in Spain — the first ever. Suicides among women in Greece have at least doubled. Many employed in Slovenia have not been paid for months. In France, 350,000 people fell below the poverty line from 2008 to 2011. One in five Finns born in 1987 have been treated for psychiatric or mental disorders, associated with the economic slump in Finland in the 1990s.

Despite Germany’s vaunted success in avoiding the high levels of unemployment prevalent across much of the EU, a quarter of the country’s employed are classified as low wage earners, almost half of new job contracts since 2008 have been low-paid, flexible, part-time so-called “mini jobs” with little security and usually no social benefits. In July last year, 600,000 employed people in Germany with social insurance did not have enough to live on.